Damaging Lack of Commitment to International Aid under Government

17 Dec, 2018

The Australian Council for International Development (ACFID) – the peak-body for aid and international development NGOs – has denounced the Government’s lack of commitment to building Australia’s aid program to alleviate poverty and build international cooperation and influence, after no new details on aid commitments emerged in the Mid-Year Economic and Fiscal Outlook (MYEFO).

The Government has continued to neglect the aid budget, failing to link it to the Consumer Price Index resulting in real-terms cuts to aid and development over the forward estimates.

Existing parts of the aid program are also to be carved-up to pay for the creation of an infrastructure lending facility for the Pacific, without clarity on its necessity or how it will operate.

ACFID CEO, Marc Purcell said:

“The Coalition Government said alleviating global poverty would have to wait until the budget was back in surplus. We are still waiting.

“The Assistant Minister, Anne Ruston said there would be ‘no reduction’ in the aid budget, but aid groups are going in to Christmas with the possibility that there’s more cuts to come.

“The aid program is a force for alleviating poverty, injustice and inequality, which serves to strengthen Australia’s international partnerships. But the Government continues to reallocate funds into kneejerk schemes that lack detail, without a strategic vision for Australia’s aid and international development budget.”

Based on median wealth per adult, Australia is now the richest country in the world, but has dropped to 19th as an aid donor compared to its OECD counterparts.1

Australia now spends only 21 cents on aid and development for every $100 of income.

To pay for the Pacific step-up and part-fund the proposed $2bn infrastructure facility – announced by Prime Minister Morrison in November – the Government is reallocating $500m from the existing grants-based aid program.

Marc Purcell said:

“The Government is playing catch-up on its own announcement on infrastructure loans. For a major shift in foreign policy, it has been ill-thought through and existing aid programs are paying the price.

“In the geopolitical competition for the region, we must ensure poverty reduction is not sacrificed for infrastructure. Health and education can’t be replaced by roads and bridges. If you build a school or hospital in the Pacific, you need teachers and nurses. One is useless without the other.”

ACFID has called for the Government to tread carefully in creating a new loan facility and if it does so, must commit to funding the loan facility over and above Australia’s existing grants-based aid budget.

Marc Purcell continued:

“Australia already funds lending for development in the Pacific through the World Bank and Asian Development Bank and we know that ten countries in the Pacific are already in high or moderate debt distress.

“What is the benefit of creating an additional lending facility? Is there sufficient demand for new loans coming from Pacific Island governments? We must answer the difficult questions now to avoid a costly failure later down the track.

“At the very least, the Government should commit to a loan facility which is in addition to the aid program, not siphoned from it.”

ENDS

For further information and interview requests, please contact Bridi Rice on 0411 958 907 or at [email protected].

The Campaign for Australian Aid encourages all Australians to come together to celebrate Australia’s contribution to reducing poverty and international development, and to ensure Australia continues to play its part.